Report: Record High Cereal Production But Number Of Undernourished Increasing

November 6, 2008 10:39 a.m. EST

Rome, Italy (AHN) - Rome-based Food and Agriculture Organization of the United Nations say that world cereal production is expected to reach a new record high this year but that the global financial prices will still affect the agricultural sectors of some countries in a negative way.

High prices tempted farmers to plant more cereal crops and favorable weather means a new record high harvest is expected, FAO said Thursday in the latest issue of its bi-annual commodity publication "Food Outlook."

That record high harvest is should be enough to meet current needs and replenish world reserves of cereal grain.

But, the report cautions that prices of cereal remain volatile, and that although they have been pushed down recently, that planting output could be affected and cause a surge in prices in 2009/10 causing a worse food crisis than the most recent one.

In addition, most of the recovery in cereal production took place in developed countries, such as the United States, because farmers in developing countries were more limited in their ability to respond to high market prices.

"The financial crisis of the last few months has amplified downward price movements, contributed to tighten credit markets, and introduced greater uncertainty about next year's prospects, so that many producers are adopting very conservative planting decisions," Concepcion Calpe, one of the report's main authors, said in a statement.

Sharp increases in food prices in 2007/2008 meant more people in the world couldn't afford adequate food and became undernourished. The number of undernourished people worldwide is estimated to be 923 million.

And lower international commodity prices haven't trickled down to lower domestic food prices in most low income countries, the report notes.

But the same thing is true in the United States where bulk organic oatmeal prices started out at 69 cents to 79 cents in most places at the beginning of the year and have steadily risen until they recently reached $14.9 to $1.59 a pound, with no signs of going back down.

The same is true of many other food items, pinching consumer budgets and causing varying degrees of food insecurity across the world.

"There is a real risk that as a consequence of the current world economic problems people will have to reduce their food intake and the number of hungry could rise further," Calpe said.

Individuals who are undernourished or malnourished run the risk of developing a variety of diseases and experiencing more sick days and loss of production and income than do people who have adequate food.